Shared Flashcard Set

Details

acctounting exam 1 module 3
n/a
12
Accounting
Undergraduate 3
09/25/2012

Additional Accounting Flashcards

 


 

Cards

Term
3 goals of the revenue cycle 
Definition

meet customer needs - quality/quantity, price and type

collect payment in timely fashion

provide support --> future sales 

Term
relevance of the revenue cycle
Definition

profit tacks on at the sale, one desires to create more profit opportunities

sale --> shipping --> billing --> collecting 

Term
payment options for "determining mktg/distr channels to generate sales"
Definition

debit and check - cash equivalent 

open ("trade") accounts - accounts reveivable = credit but not secured debt. cause cash flow issues, no collateral, must sue in court for judgement then collection 

store credit card - risk of loss, like A/R but is formal debt, cash flow - time between sale/payment

independent card - cash equivalent, but fees - 2-10% (interchange fee) 

notes receivable - formal agreement, collateral, principal rate and time --> P x R x T = interest cost 

 

Term
bill of lading 
Definition
indicates the terms as agreed between the seller and a common carrier 
Term
relevance of the expenditure cycle 
Definition
to be efficient through policy and procedure to minimize costs and increase revenue 
Term
revenue cycle definition
Definition
events that involve providing goods/services to customers 
Term
expenditure cycle definition
Definition
events in which the business exchanges assets for goods and services 
Term
3 goals of expenditure cycle 
Definition

get the quantity and best wuality good/service at least cost when needed

ensure timely payment for good /service 

develop good relationships with suppliers 

Term
remittance advice and sales invoice 
Definition

customer payment to identify the correct account

 

requests payment from customer 

Term
annualized interest: 2/10, n/45 
Definition

    365       x   02

45-10            1.00 - .02

 

365/(invoice days - discount days) x discount %/100% - discount%

 

bottom line: you're better off borrowing from a bank at less that 21.3% and pay bill within discount period  

Term
Interest rate calculation 
Definition
principal x annual rate x time = $ interest due 
Term
goal of the conversion cycle 
Definition
manufacture desired quality of products using resources efficiently and effectively 
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